What healthy strength looks like
A trend with fuel prints highs WITH participation: open interest building as new money opens, funding warm but not desperate, each push recruiting fresh positioning. The price-up-OI-up regime is the market agreeing with itself — opinion and price rising together.
The divergent high
The warning configuration: price at new highs while open interest flattens or falls. Rallies on FALLING OI are powered by shorts closing — a bid with a built-in end, since covering exhausts itself. Cooling funding at highs says the same thing in price terms: nobody is paying up to join anymore. The move is spending stored positioning rather than attracting new conviction.
The mirror at lows
Symmetrically, new lows with flat OI and normalizing funding mark a decline running on fumes — the sellers who wanted out are out. Combined with a side-heavy liquidation print, this is the anatomy of most durable turns: forced flow completing exactly as voluntary flow stops arriving.
Reading it
At every extreme ask what positioning did while price got there. Confirmation is a crowd still arriving; divergence is an extreme borrowing its energy from the past — tradeable, but on a clock.